Crypto Arbitrage
Crypto arbitrage allows traders to exploit inefficiencies in the market. It is a surprisingly simple concept with opportunities cropping up when there are price inconsistencies across crypto exchanges. Read on to find out the meaning of cryptocurrency arbitrage, its benefits, risks and the useful tools available to help generate profits.
Crypto Brokers
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1
Interactive Brokers -
2
Plus500USTrading in futures and options involves the risk of loss and is not suitable for everyone. -
3
NinjaTrader -
4
eToro USAeToro USA LLC and eToro USA Securities Inc.; Investing involves risk, including loss of principal; Not a recommendation -
5
OANDA USCFDs are not available to residents in the United States. -
6
Crypto.com
Here is a short summary of why we think each broker belongs in this top list:
- Interactive Brokers - IBKR lets you purchase and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin at competitive commission rates and without needing a crypto wallet. Additionally, there is a range of other diverse assets to explore, such as crypto indices like the NYSE Bitcoin Index, as well as futures contracts like the BAKKT Bitcoin Futures.
- Plus500US - Plus500’s Micro-Bitcoin and Micro-Ethereum futures only allow traders to scratch the surface of crypto trading with bets on the two most popular digital assets. Importantly, you cannot buy and own the cryptos with these derivative contracts - you are speculating on their price.
- NinjaTrader - You can get exposure to micro Bitcoin futures through the CME Group’s centralized exchange, which is highly regulated by the US CFTC. Micro contracts allow you to trade a fractional size of one Bitcoin, giving you more risk control and order flexibility.
- eToro USA - eToro US offers 24 tradeable cryptoassets, with just a 1% buying/selling fee added to the spread. Additionally, there are 80 different coins available through the broker’s proprietary wallet service. You can also practice your crypto strategies easily by switching between live and demo mode. Crypto asset investing is highly volatile and unregulated. No consumer protection. Tax on profits may apply.
- OANDA US - Cryptocurrency trading is offered via Paxos, a separate entity from Oanda. You can speculate on the world’s biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Through the broker’s partnership with Paxos, clients can spot trade cryptocurrencies on the itBit exchange through the OANDA native platform.
- Crypto.com - Crypto.com has bolstered its suite of cryptos, now offering more than 400 digital tokens, from Bitcoin through to lesser-known options. Crypto.com supports both spot and derivative trading, as well as sophisticated algo trading through custom strategies and APIs.
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| Coins | BTC, LTC, ETH, XRP |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | 0.12%-0.18% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower |
| Minimum Deposit | $0 |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- The new IBKR Desktop platform takes the best of TWS while adding bespoke tools like Option Lattice and Screeners with MultiSort to create a genuinely impressive trading experience for day traders at every level.
- Interactive Brokers has launched ForecastTrader, a unique, zero-commission product where users can trade yes/no Forecast Contracts on political, economic, and climate events, with fixed $1 payouts per contract, 24/6 market access, and 3.83% APY on held positions.
- The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.
Cons
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
Plus500US
"Plus500US stands out as an excellent choice for beginners, offering a very user-friendly platform, low day trading margins, and access to the Futures Academy to enhance trading skills. Its powerful tools and reliable service helped it scoop second place in DayTrading.com's annual 'Best US Broker' award."
Plus500US Quick Facts
| Coins | MicroBitcoin, MicroEthereum |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | WebTrader, App |
| Minimum Deposit | $100 |
| Regulator | CFTC, NFA |
| Account Currencies | USD |
Pros
- Plus500US excels for its low fees with very competitive day trading margins and no inactivity fees, live data fees, routing fees, or platform fees
- The straightforward account structure, pricing model and web platform offer an easier route into futures trading than rivals like NinjaTrader
- The trading app provides a terrific user experience with a modern design, a clean layout and mobile-optimized charts
Cons
- Plus500US does not offer social trading capabilities, a feature available at alternatives like eToro US which could strengthen its offering for aspiring traders
- Despite competitive pricing, Plus500US lacks a discount program for high-volume day traders, a scheme found at brokers like Interactive Brokers
- The proprietary platform is user-friendly but lacks advanced technical analysis tools found in third-party solutions like MetaTrader 4
NinjaTrader
"NinjaTrader continues to meet the demands of active futures traders looking for low fees and premium analysis tools. The platform hosts top-rate charting features including hundreds of indicators and 10+ chart types."
Tobias Robinson, Reviewer
NinjaTrader Quick Facts
| Coins | BTC |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | Floating |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | NinjaTrader Desktop, Web & Mobile, eSignal |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD |
Pros
- Low fees are offered, with $50 day trading margins & commissions from $.09 per micro contract
- NinjaTrader is a widely respected and award-winning futures broker and is heavily authorized by the NFA and CFTC
- NinjaTrader continues to deliver comprehensive charting software for active day traders with bespoke technical indicators and widgets
Cons
- Non forex and futures trading requires signing up with partner brokers
- The premium platform tools come with an extra charge
- There is a withdrawal fee on some funding methods
eToro USA
"eToro remains a top pick for traders looking for leading social investing and copy trading services. With a low deposit, zero commissions and an intuitive platform, the broker will meet the needs of newer day traders."
eToro USA Quick Facts
| Coins | BTC, ETH, BCH, DASH, LTC, ETC, MIOTA, XLM, EOS, NEO, ZEC, XTZ, MKR, COMP, LINK, UNI, YFI, DOGE, AAVE, ALGO, MANA, ENJ, BAT, MATIC, FLR, SHIBxM |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | BTC 0.75% |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | eToro Trading Platform & CopyTrader |
| Minimum Deposit | $100 |
| Regulator | SEC, FINRA |
| Account Currencies | USD |
Pros
- A free demo account means new users and prospective day traders can try the broker risk-free
- The broker's Academy offers comprehensive learning materials for beginners to advanced-level investors
- eToro USA Securities is a trustworthy, SEC-regulated broker that is a member of FINRA and SIPC
Cons
- The proprietary terminal doesn't support trading bots and there are no additional stock market analysis tools
- There's no MetaTrader 4 platform integration for traders who are accustomed to using third-party charting tools
- Average fees may cut into the profit margins of day traders
OANDA US
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
OANDA US Quick Facts
| Coins | BTC, ETH, LTC, BCH, PAXG, LINK, UNI, AAVE |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | $100 |
| Crypto Lending | No |
| Crypto Staking | No |
| Platforms | OANDA Trade, MT4, TradingView, AutoChartist |
| Minimum Deposit | $0 |
| Regulator | NFA, CFTC |
| Account Currencies | USD, EUR, GBP, CAD, AUD, JPY, CHF, HKD, SGD |
Pros
- OANDA is a reliable, trustworthy and secure brand with authorization from tier-one regulators including the CFTC
- The proprietary OANDA web platform continues to deliver a highly competitive charting environment, including 65+ technical indicators powered by TradingView
- Beginners can get started easily with $0 minimum initial deposit
Cons
- It's a shame that customer support is not available on weekends
- The range of day trading markets is limited to forex and cryptos only
- There's only a small range of payment methods available, with no e-wallets supported
Crypto.com
"Crypto.com is a snug fit for aspiring crypto traders who want to buy, sell and trade over 400 digital tokens. Its strike options and prediction markets spanning financial, economic, election, sport, and cultural events via its CFTC-regulated entity also make it a secure option for US traders interested in binary-style contracts on an intuitive app."
Crypto.com Quick Facts
| Coins | BTC, CRO, ETH, XRP, LTC, EOS, XLM, USDC, ATOM, LINK, XTZ, BCH, VET, ICX, ADA, ENJ, ALGO, KNC, NEO, DAI, PAXG, BAT, COMP, OMG, MANA, QTUM, CELR, MKR, UNI, YFI, BAND, EGLD, WBTC, AAVE, DOT, REN, ONT, LRC, CRV, ZIL and many more |
|---|---|
| Crypto Mining | No |
| Auto Market Maker | No |
| Crypto Spread | 0.075% (spot), 0.034% (derivatives) |
| Crypto Lending | Yes |
| Crypto Staking | Yes |
| Platforms | Own |
| Minimum Deposit | Varies by payment method |
| Regulator | SEC, FCA, MAS, AMF, CySEC, CBI, ASIC, FINTRAC, CIMA, VARA, OAM, HCMC, CFTC, OSC, KoFIU |
| Account Currencies | USD, EUR, GBP, CAD, AUD, NZD, ZAR, TRY, SEK, NOK, DKK, CHF, HKD, PLN, CZK, AED, SAR, HUF, BRL, KES |
Pros
- Crypto.com uses a cold wallet solution that integrates multi-signature technology and geographic distribution to enhance security. This approach ensures robust protection of user assets with highly secure offline storage.
- Crypto.com has expanded beyond crypto in some regions, offering over 5000 stocks and ETFs for traders looking to build diverse portfolios and opportunities in different sectors.
- The Crypto.com Exchange platform offers sophisticated bots, including Dollar Cost Averaging (DCA), Time-Weighted Average Price (TWAP), and Grid Trading bots. These tools allow traders to automate strategies, including leveraged perpetual trades, minimizing manual effort and slippage.
Cons
- Withdrawal fees apply to crypto transfers and fiat withdrawals, and these can be significant for active traders making smaller transfers. The minimum withdrawal limits are also relatively high, which restricts flexibility for managing smaller portfolios or quick liquidity needs.
- The app's high bid-ask spreads on many coins can be costly for traders placing market orders. Wide spreads mean the price you pay when buying is noticeably higher than the price you receive when selling, cutting into profits, especially on lower-volume trades.
- Customer support primarily relies on chatbots and email, with limited reliable phone support from our testing. This can lead to delays in resolving urgent issues, such as account access or transaction problems, which can be frustrating for crypto day traders who need quick assistance.
What Is Crypto Arbitrage?
Cryptocurrency arbitrage is a specific form of financial arbitrage that capitalises on crypto volatility, liquidity and decentralisation. Arbitrage trading is a strategy that takes advantage of market inefficiencies and price differences across different markets and/or assets. Specifically, it looks carefully at the rates offered by exchanges to find ways to make a profit by quickly trading in a loop.
Different exchanges will have different numbers of buyers and sellers, different trading preferences and different specialisms. This helps ensure that some inconsistencies occur between spot rates for different markets or instruments, such as Bitcoin.
Types Of Crypto Arbitrage
Spatial Crypto Arbitrage
Perhaps the simplest and most common method is spatial arbitrage. This involves looking at one instrument on two different exchanges. If these exchanges list the crypto at different prices, traders can buy from the cheaper exchange and immediately sell from the more expensive one, instantly making money from the discrepancy.
The easiest way to do this is to buy, let’s say Ethereum, from one exchange, transfer it to another and then sell it. Unfortunately, this is inefficient, both taking extra time to complete the transfer and incurring additional charges.
To avoid this issue, traders can hold their fiat currency in one exchange and their crypto in the other. When the opportunity presents itself, the same buy and sell order can be placed at the same time across the two exchanges. This would give the trader additional fiat currency while maintaining the same crypto capital. This method performs trades without transferring from one exchange to another, taking less time and incurring fewer fees.
Triangular Arbitrage
Triangular crypto arbitrage is a little more complex, involving three trades instead of two, all of which are usually carried out on the same exchange. This method looks at three different cryptos, trading through each of them until you are back to the original asset.
For example, a trader might spot an opportunity in Bitcoin and Ethereum exchange rates. They could then exchange their Bitcoin for Ethereum, which could then be traded for Ripple and finally back to Bitcoin. If the spot rates are inconsistent, the trader could end up with more Bitcoin than they had initially owned, despite trading around a loop.
Flash Loan Arbitrage
A slightly trickier form of crypto arbitrage, flash loan arbitrage, takes advantage of the advanced technology behind altcoins and lending approaches. Flash loans are instant cryptocurrency loans offered by platforms like Aave that allow traders to borrow large amounts of digital coins without any collateral. This presents a lending arbitrage opportunity to take advantage of differences in interest rates by flash loan providers.
Other Arbitrage Methods
Arbitrage goes beyond the strategies explained above, providing opportunities to traders both inside and outside of the altcoin world. Crypto derivatives arbitrage works in the same way as those, though it uses securities and derivatives of digital currencies, rather than the tokens themselves. One method that is common among hedge funds is to buy cheap stocks of companies before a merger when the market is inefficient and unsure.
Benefits Of Crypto Arbitrage
Speed
Profits from crypto arbitrage are realised as soon as the arbitrage loop is complete and trades settle. This is faster than many other types of trading, and suits day traders.
Opportunities
With hundreds of exchanges and many thousands of cryptocurrencies around the world, there’s a great amount of scope for arbitrage opportunities to present themselves.
Volatility
One of the reasons for the popularity of cryptocurrencies in the trading world is the consistently high levels of volatility they demonstrate, even Bitcoin, which has been around for over a decade. The decentralisation and proof systems of cryptos help to ensure varying levels of supply and demand, keeping volatility high. This volatility is great for crypto arbitrage, as the more that prices change, the more likely it is that markets will show inconsistent rates.
Immaturity
The relative youth of cryptocurrencies and their development help create irregularities and disjointedness between exchanges as support networks are less well established. This increases the number of crypto arbitrage opportunities that are created.
Competition
While total cryptocurrency trading volume is still lower than the global FX market, arbitrage on major pairs such as BTC and ETH is now highly competitive and often dominated by professional market‑making and high‑frequency trading firms operating across many exchanges. As a result, the most obvious mispricings on large, reputable exchanges are usually corrected very quickly, and meaningful arbitrage opportunities for retail traders tend to appear more on smaller, less liquid venues or during periods of extreme volatility.
Price Differences
On large, liquid exchanges, price differences are often small (sometimes well under 1%), though they can widen to a few percent during volatile periods or on less liquid markets; in rare, stressed situations, much larger dislocations have occurred.
Risks Of Crypto Arbitrage
Regulation
While there are hundreds of crypto exchanges and thousands of tokens out there, the regulatory framework to deal with this sector is relatively young, and there’s generally less consumer protection for retail crypto traders than for day traders who deal with traditional asset classes.
That said, there are several reliable crypto trading brokers and exchanges out there, and governments around the world have been taking action to properly regulate the industry. The UK government, for example, set forth draft legislation on the topic in 2025, Vietnam introduced a crypto licensing regime in the same year, and Pakistan has set up a Virtual Assets Regulatory Authority.
Fees
While it is a simple process to wrap your head around and try to calculate potential profits, fees could limit the profitability of arbitrage opportunities. Calculations should consider deposit and withdrawal fees, both in fiat and cryptocurrencies, as well as trading charges implemented by the exchange.
Security
While it is most profitable to store some assets on all your viable exchanges to reduce the overall time requirement, this can increase your security risk. Holding capital in many different wallets and accounts produces a larger risk of being hacked for at least one of them.
Volume Requirements
The relatively small profit percentages that are available with crypto arbitrage often mean that large amounts of capital are required for each opportunity to produce meaningful profits.
Timing
Crypto arbitrage opportunities are quick to appear and resolve. The short lives of these opportunities mean that traders must be on the ball to take advantage of them. This can be tricky, especially with the long transaction and verification times associated with crypto mining in some blockchains.
Crypto Arbitrage Bots
The need for low latency, calculations and trade placement can make crypto arbitrage a tricky business. Therefore, most traders have moved towards automated arbitrage, utilising bots (robots) and software tools to maximise their chances of success.
There are two routes that traders can go down with automated crypto arbitrage, purchasing a pre-made bot online or writing their own. There are many bots available on the internet offering different specialisms and approaches, so traders should ensure they carry out detailed comparisons and fully understand the methods being implemented by a trading bot before entrusting their money to it. It is crucial, though, to perform your due diligence by checking reviews of arbitrage bots and, if possible, observing how they operate under real market conditions.
For those Bitcoin traders who prefer to be more in control, all it takes is a little programming know-how and some time to develop your own bot. There are plenty of ‘how to’ guides and tutorials online for building trading bots and most crypto exchanges support APIs, which allow integration of home-written software. The development of a bot’s formula can be done relatively easily, with some capable of basing their actions on Excel spreadsheets and calculators.
And, the swift developments in AI have created more opportunities for traders interested in programming their own trading robots, with tools that can help traders with little or no coding knowledge dive into this field.
Crucially, remember that arbitrage trading is not free from scams and unscrupulous actors, and remain vigilant when choosing your trading robot provider. Avoid any provider that promises guaranteed returns or very low risk, and look for firms that are well reviewed and serve large numbers of clients.
Crypto Arbitrage Software & Tools
Beyond the realm of automated trading bots, crypto arbitrage can be supplemented and aided with many other tools and pieces of software. Many companies offer a range of additional services, such as live charts, scanners and finders that monitor and screen opportunities, sending alerts to traders on helpful dashboards, such as the Telegram bot.
Crypto arbitrage can also be done without a computer using mobile arbitrage‑scanner apps that compare prices across exchanges and include calculators for estimating potential profits.
What To Look For In Crypto Arbitrage Platforms
An important consideration for prospective arbitrageurs is which platform would suit your needs. There is no objectively best crypto arbitrage website or platform, as every trader will have different needs, and there are many available.
While you could work over many general platforms, assessing profitability across several windows, this is a slow process. It is often better to find a platform that is connected to a range of platforms, allowing the much easier establishment of arbitrage opportunities.
The top platforms will also support automated arbitrage, either with dedicated APIs to support external bots or even built-in tools, trackers and auto trading bots that come with the platform.
To maximise profits, especially given the small margins of crypto arbitrage, traders should search for a platform with a range of deposit and withdrawal methods, as well as low fees. This allows traders to withdraw raw profits, instead of having to exchange again for withdrawable currencies.
Final Word
Cryptocurrency arbitrage is an opportunity for traders unlike any other. Simple retail arbitrage in traditional markets has become harder as networks improved and regulation tightened, compressing obvious mispricings. The decentralisation of cryptocurrencies, however, provides consistent volatility and opportunity for those who know where to look.
Whether on a single exchange or over hundreds of them, traders can carry out crypto arbitrage manually or with the help of robots. However, care should always be taken when capital is at risk; ensure to read reviews, understand what is being offered and maintain the security of funds to make sure that profits are not jeopardised.
FAQ
Does Crypto Arbitrage Work And Is It Profitable?
Crypto arbitrage can work; its popularity is not baseless. It is important, however, to ensure that all fees are considered in profit calculations and to understand that there may well be times when the opportunity will close too quickly to be exploited.
Is Crypto Arbitrage Legitimate?
Many people doubt the legality of crypto arbitrage; however, it is perfectly legal as traders are simply capitalising on inefficiencies in the market. This is also beneficial as it helps to close these discrepancies quickly, improving the efficiency of crypto markets.
What Is A Crypto Arbitrage Bot?
Bots are pieces of software that are written to automate processes that would otherwise be time-consuming and difficult. Bots are generally written in Python for cryptocurrency arbitrage and can be found on the internet, sometimes even for free. Bots are especially useful for crypto arbitrage as there is such a small timeframe of profitability.
Where Can I Learn About Crypto Arbitrage?
There are many guides online that lay out crypto arbitrage, its various strategies and the algorithms that bots are based on. Some websites, like Crypto University, offer training courses, calculators and helpful YouTube videos.
Can You Carry Out Crypto Arbitrage In Nigeria?
Yes, crypto arbitrage is available in all countries with access to crypto exchanges, whether local or abroad. For example, a Korean trader could use the internet to assess an opportunity between exchanges in India and South Africa, so long as they can open accounts there.